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Last week, activist investor JANA Partners sent a letter to Charles River Laboratories International (NYSE: CRL) highlighting the 35% of shareholders who are opposed to Charles River’s acquisition of a Chinese pharmaceutical company and the combination of the two businesses. Dated June 16, the letter followed JANA Partners’ letter of June 7 in which the activist investor stated its intention to vote against the transaction and expressed its concern about Charles River’s plans to purchase Chinese pharmaceutical outsourcing company WuXi PharmaTech for $1.6 billion. Charles River’s intentions to purchase WuXi were announced on April 26, and soon after, on June 3, Jana met with the Chairman, President and CEO of CRL and the Chairman and CEO of WuXi.

According to Hedge Fund Solutions’ Catalyst Research Report, Charles River’s recent share price underperformance underscores the danger for shareholders of inefficient capital allocation and JANA Partners’ concern for the increased financial and operations risks the acquisition would pose. Instead, with the same multiple of leverage it would assume in the proposed transaction, Charles River could repurchase 19% of its undervalued outstanding shares. In the June 16 letter Jana further stated that if the company redesigned the acquisition to avoid a shareholder approval vote they would attempt to replace the board at next year’s annual meeting.

Neuberger Berman also took an opposing stand against the acquisition in a June 16 letter, changing their filing status from “passive” investor to “active” the same day. The investor cautioned the board not to endorse any revision to the proposed WuXi transaction that bypasses the need for a stockholder vote.